Tag Archives: recession

Political Rants

Sucking sound +20.

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We are approaching the grim milestone of twenty years after the passage of NAFTA, the North American Free Trade Agreement – a pact that is described even by bland media outlets like NPR as having benefited only corporations in the 3 countries affected. Twenty years after its passage and signing by President Clinton, the evidence is in and it seems clear that many if not all of the criticisms were justified. And now that it is well-established and that we have entered into numerous other trade deals modeled on NAFTA, mainstream news organizations can report the obvious, namely:

  • NAFTA has fueled immigration to the U.S. from Mexico. By forcing Mexican corn farmers, for instance, to compete with Cargill, the agreement effectively destroyed large segments of rural livelihood in Mexico, sending economic refugees streaming into their cities and ultimately across the U.S. border in a desperate bid to find gainful employment. (I might add that, coupled with the high demand from the U.S. for illicit drugs, this destruction of legitimate crop farming has likely led to greater resort to illegal agriculture, marijuana production, etc., in the Mexican countryside.)
  • NAFTA has undermined employment and wages in all three countries. This is the sad truth behind Ross Perot’s “giant sucking sound” – the allure of moving production to Mexico has emptied factory towns in the United States, leaving us with the miserable husk of an economy we’ve been living through these past five years in particular.
  • NAFTA has provided a pernicious model for other agreements. The Trans Pacific Partnership is just the latest in a series of NAFTA like “free-trade” – actually, investor rights – agreement that have popped up since 1994. Some have failed, like the Multilateral Agreement on Investment (MAI), which was dropped after news of its consideration became widely distributed. But generally, these pacts have contributed to a neo-imperial system of enormous corporate wealth unattached to any nation or government, pushing labor back on its heels.

The thing is, we are grappling with something more serious than a recession, and NAFTA is one manifestation of the deeper problem we face. Our basic right to earning a livelihood is under attack, and we have to be more determined in our efforts to not only defend against this attack, but to push back and press forward.

luv u,

jp

Political Rants

Austeritarianism.

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The international consensus on forced austerity was soundly rejected this past week in both Greece and France. That’s what happens when you let people speak their minds – they sometimes opt for inconvenient solutions. As much as I love Jon Stewart, even he got this one wrong – the Greeks are not political confusniks addicted to cradle-to-grave government benefits. Their financial train wreck is as much a function of wealth privilege over there as it is over here. When they went to the polls this past weekend, they chose the parties that opposed the Euro zone plan, both on the left and the right. That’s not surprising; the bailout basically benefits that country’s financial sector, at the cost of Greek workers. There have always been political groupings on the extreme left and right in Greece, so everyone went for the candidates who (a.) opposed the bailout and (b.) aligned with them politically, generally speaking.

The bankruptcy of what Greek and French voters rejected couldn’t be more obvious. Greece has gone through several cycles of austerity-driven budget cuts, massive layoffs, rate hikes, etc., and the result has been the same. Step 1: You cut budgets, you throw government workers out on the street, and there’s less money in the economy. Step 2: Lower aggregate earnings and consumer spending means less revenue into the government, which in turn widens the budget deficit. Step 3: The Eurozone demands more cuts.  Step 4:  see Step 1. Mix and repeat. Can you say “death spiral”? This is, in essence, what is happening in England and in the United States in slightly less dramatic fashion, though on a much grander scale since their economies are so much larger than Greece’s.

So… the people have spoken. And the markets are reacting. Not real fond of democracy, the investment community. It involves way too much uncertainty. The fact is, they are grappling with many of the same problems that are plaguing us. We had an overinflated housing market, blown up even further by derivatives speculation, then when the whole house of cards came crashing down, our deeply deregulated banking system left some of our largest financial institutions almost fatally exposed. Their crisis was in part precipitated by ours, but because they have a monetary union and not a political union, it seems like 20-odd different crises rather than one big conglomerated one. And just as austerity is lengthening the depression (yes, depression – ask Krugman) over here, it will bring only misery to the continent as well.

This system is obviously broken. Cutting spending may serve other political ends, but it will not fix the problem.

luv u,

jp